Archive

Oregon spent $248 million developing its own ObamaCare insurance exchange and never enrolled a single person online.

That kind of return on investment convinced state officials “to abandon the exchange entirely and switch to the federal website, the first state to do so,” writes Lou Cannon. “The Oregon board made its decision after being told it would cost $78 million to fix Cover Oregon compared to $4 million to $6 million to make the technical changes needed to join the federal exchange.”

Investigations are ongoing into why the state’s heavily bankrolled website was such a bust. Once thought to be a model for progressive high-tech governing, Cover Oregon is now a source of embarrassment for the state’s Democratic establishment.

Whatever the causes for the technology failure, Oregon’s switch to the federal alternative could hit enrollees hard. An estimated 70,000 Oregonians enrolled with paper applications through Cover Oregon, making many of them eligible for federal subsidies. However, the text of ObamaCare doesn’t make subsidies available if insurance is bought via the federal website. So far, the IRS isn’t making the distinction, but a three-judge panel at the D.C. Circuit seems ready to apply the law as written.

The intent of ObamaCare’s drafters was to reward state citizens with federal subsidies if they chose to shoulder the start-up costs associated with running a state-based exchange. Now that Oregon is pulling the plug on its failed website, its citizens may be losing the assistance they need to make ObamaCare affordable.

Ben Domenech says that one way for conservatives to reframe their economic message before the 2014 midterms is to start using the phrase, “free market fairness.”

“Those on the right should be prepared to make the case that the warped relationship between Wall Street and Washington needs to be fixed, that socialized risks and privatized profits are fundamentally unfair, and that… equality-focused policy solutions, and those of the left, would hurt income mobility and systematically destroy wealth and growth,” he writes in the Wall Street Journal.

Free market fairness can be thought of as the alternative to crony capitalism. The latter can be defined as “government efforts to tilt markets in favor of preferred firms [to] reward political connections and lobbying money.” Troy’s recent article on eliminating the elite-driven Export-Import Bank is an excellent example of how conservatives can show they are serious about removing barriers to equal economic opportunities.

Adopting the free market fairness frame also strengthens the GOP’s insistence on a government dedicated to the rule of law. As Solyndra and other Recovery Act era abuses fade from memory, the rule of law critique has been increasingly focused on abuses of executive discretion like Deferred Action for illegal immigrants, Justice Department refusals to defend the Defense of Marriage Act and the growing litany of delays and waivers of ObamaCare. Refocusing on how crony capitalism picks winners and losers would bring the rule of law argument full circle.

Maintaining a fair playing field isn’t the same as giving one team extra points. The only way the American dream can remain open to everyone is if the people in charge of the rule book fairly to all participants.

Any hopes the GOP had that Kathleen Sebelius’ resignation as HHS Secretary might convince fellow Obama Cabinet member Eric Holder to do the same were quashed on Friday.

“The Attorney General does not plan to leave before the mid-terms,” said a Justice Department official. “That does not mean that he is definitely leaving after the mid-terms, just that he is at least staying through that time.”

Prior to Sebelius taking the fall for ObamaCare’s disastrous rollout, it was Holder who was the face of bureaucratic scandal. Though voted in Contempt of Congress by the House of Representatives, Holder continues to stonewall investigators on details surrounding the “Fast and Furious” program that led to the deaths of at least one American and dozens of Mexicans.

Credit Sebelius with this much – At least the department she ran wasn’t responsible for killing anyone on her watch.

In that vein, the U.S. Chamber of Commerce’s Global IP Center held its 2014 IP Champions event in Washington, D.C. this week to celebrate organizations and people who have particularly embodied and advanced IP over the past year. It brought a packed audience, the panels were informative and entertaining, and the award recipients spanned an impressive range of scientists, songwriters, entrepreneurs, engineers, foreign dignitaries and political leaders like Congressman Doug Collins (R – Georgia).

Most importantly, the recipients highlighted the critical value of patents, copyrights and trademarks in protecting their creations, encouraging further innovation and – critically – helping protect consumers against unsafe and defective counterfeit goods. It is no coincidence that the United States stands as the most scientifically and artistically prolific nation in human history, given our tradition of strong IP protections in comparison to other nations and legal systems. That’s a truism that bears emphasis and preservation in our increasingly interconnected global economy, lest we recede in our leadership role and witness a diminution in the pace of innovation.

If President Barack Obama wants to improve income inequality he could start by removing ObamaCare’s barriers to working more hours.

“The savings from restricting hours worked can be enormous,” explains the Wall Street Journal. “If a company with 50 employees hires a new worker for $12 an hour for 29 hours a week, there is no health insurance requirement. But suppose that worker moves to 30 hours a week. This triggers the $2,000 federal penalty. So to get 50 more hours of work a year from that employee, the extra cost to the employer rises to about $52 an hour – the $12 salary and the ObamaCare tax of what works out to be $40 an hour.”

Liberals thought themselves clever by dropping full-time status to 30 hours per week from the traditional 40. What they didn’t count on was that the actual result would be an 11 hour per week pay cut.

Does the federal government have too little on its plate these days, or too much? The American public is unequivocal on that question, with a record 60% telling Gallup that bureaucrats are wielding too much power. Only 7% say “too little.”

Despite that ugly reality, the Federal Communications Commission (FCC) seeks to increase its level of micromanagement over our telecommunications market. The auction of spectrum from television stations to wireless carriers is obviously long overdue, and ideally would improve service quality and speed within that growing market. Unfortunately, the FCC intends to limit participation in bidding on highly valuable low-frequency airwaves by excluding the largest and most successful carriers in many markets. As Bret Swanson observes at TechPolicyDaily.com, that threatens to “blow up” the entire auction:

Because the auction depends on inducing the broadcasters to give up their spectrum in the first place, if two of the largest prospective bidders are limited, or sit out entirely, the whole thing could blow up. Without the two largest bidders, prices are likely to be much lower, and broadcasters might say, no thanks. No broadcaster participation, no new spectrum for new mobile innovations.”

The wireless industry has brought innovation scarcely imaginable even five years ago, but that vitality will be jeopardized if bureaucrats pursue this sort of overregulation and abandon the regulatory light touch approach. As Swanson ominously notes:

The FCC is about to take a huge risk with a hugely successful U.S. industry. It’s also openly favoring and disfavoring specific firms, something U.S. law used to try to avoid. The added irony, although it shouldn’t matter in a country that values the Rule of Law, is the favored firms are both foreign and the two disfavored are domestic.”

Instead if new FCC micromanagement, what we need is an open and fair incentive auction. Allowing the market to work, unencumbered by such bureaucratic arbitrariness, will unleash more of the profound potential that the wireless marketplace possesses to spark new social, economic and technological realities for America’s consumers.

In an interview with CFIF, Sally Pipes, President, CEO and Taube Fellow in Health Care Studies at the Pacific Research Institute, discusses how the Obama Administration’s enrollment figure celebration for ObamaCare’s insurance exchanges is premature, why four years of ObamaCare failures is long enough and her testimony before the U.S. Senate on what the U.S. health care system can learn from other countries.

Darrell Issa (R-CA), Chairman of the House Government Oversight & Reform Committee, wants the Census Bureau to explain why it failed to tell Congress that it would change the way it measures whether people have health insurance in the same year ObamaCare goes into effect.

The new survey produces a lower uninsured rate than previous versions asked by the Census Bureau. The concern is that the new lower numbers will make ObamaCare enrollment figures now and the in the future appear to be higher than they would have had the same questions been asked.

“A two-percent adjustment in the nationwide uninsured rate would represent a change in status for six million Americans and could be used in misleading arguments about the coverage impact of the Affordable Care Act,” Issa wrote in a letter to the Census Bureau.

Politically-motivated shenanigans are nothing new for ObamaCare, but this latest revelation indicates that even a highly respected agency like the Census Bureau – which researchers in several fields look to for objective data – is being used to push the narrative that the controversial health law is a historic success; data to the contrary notwithstanding.

Soon-to-be-former HHS Secretary Kathleen Sebelius “is considering entreaties from Democrats who want her to run against her old friend, Senator Pat Roberts, Republican of Kansas,” reports the New York Times.

It’s hard to see how this news is anything other than an attempt to put a softer spin on Sebelius’s disastrous tenure as the face of ObamaCare.

Considering how much the Left loathes her mismanagement of Healthcare.gov – driving down public confidence in government to record lows – it’s no surprise that friends of Sebelius are trying to rehabilitate her image by saying the former two-term Kansas governor could be just the candidate to topple Roberts.

Making the GOP spend money and time on a race they would otherwise win easily could burnish Sebelius’s ‘good soldier’ credentials. Actually winning the seat would give Democrats their first U.S. Senator from Kansas since 1939.

Still, whatever goodwill Sebelius had as governor has been forgotten long ago. In the current reality, it’s difficult to see how she could step down from such a bad job at HHS into an underdog Senate campaign and emerge as anything other than a twice rejected public servant.

In recent weeks, we’ve highlighted the pernicious effort to make the Internal Revenue Service not only the nation’s tax enforcer, but also its tax preparer:

This IRS scheme is part of a broader, ongoing campaign to socialize the tax preparation business in America entirely, which would ultimately make it the nation’s one-stop-shop tax preparation service. That would obviously create a conflict of interest with the IRS serving as both tax preparer and tax collector, and it would surely result in higher tax calculations to facilitate wasteful federal spending.”

Believe it or not, however, some continue to assert that it’s an idea whose time has come. Because, according to ProPublica, Barack Obama supports it and the Europeans do it. And allegedly, the notoriously tax- and bureaucracy-loving Ronald Reagan was also an enthusiast.

But Ryan Ellis of Americans for Tax Reform, one of the most informed and cogent tax experts in contemporary public discourse, throws cold water on the idea in a new commentary entitled “Top Seven Reasons the IRS Shouldn’t Do Your Taxes for You”:

The basic argument is always the same: the IRS has all this information on you anyway, so wouldn’t it just be easier and better if they simply prepared your taxes for you? Wouldn’t that be better than having to pay some rent-seeking middleman? This flawed line of thinking fools many a reporter this time of year, but it’s refuted pretty easily once you scratch beneath the surface.”

In trademark fashion, Ellis details those seven reasons in clear, convincing form. It’s well worth the quick read on an issue that is becoming increasingly important.

But his conclusion is worth particular emphasis:

The bottom line. These tired, annual articles from white collar lefty pseudo-academics living in the Beltway all ignore the really big story here: namely, that it’s a giant conflict of interest for the IRS to determine your tax liability, and then to be able to seize your wages and assets in order to collect that tax liability. To ignore that is to be criminally-naive about the way the IRS goes about its business. It betrays either a lack of knowledge of how the tax system actually works, or it’s a giant con job by people whose common cause with the IRS is growing the size of government.

Demonizing the tax prep industry doesn’t change any of the arguments from above. It does, however, provide a thin shield of self-righteousness for what is otherwise a fool’s errand.”

After compiling three decades-worth of responses to health insurance questions, the U.S. Census Bureau is about to implement a new version that will make it impossible to compare insurance coverage data before and after ObamaCare.

Coincidence?

It gets better.

“An internal Census Bureau document said that the new questionnaire included a ‘total revision to health insurance questions,’ and, in a test last year, produced lower estimates of the uninsured,” reports the New York Times.

In practical terms this means “it will be difficult to say how much of any change is attributable to the Affordable Care Act and how much to the use of a new survey instrument.”

According to the Times, the new survey has been in the works for awhile. But there is no explanation given for why it is going into effect in the same year when millions of Americans are transitioning to the ObamaCare regime. The controversial health law was sold as a way to extend coverage to tens of millions of uninsured Americans. Why would the non-partisan Census Bureau make it impossible for observers to see whether ObamaCare actually achieved its goal?

Whatever the official line, it’s difficult to understand the timing of this development as anything other than a naked attempt to avoid accountability.

Here’s a suggested question for GOP Senators to ask Sylvia Burwell – President Barack Obama’s nominee to succeed Kathleen Sebelius as Secretary of Health and Human Services – at her confirmation hearing next month.

Studies by the RAND Corporation and Goldman Sachs estimate as much as 20 percent of the claimed 7.5 million ObamaCare enrollments have not paid their first month’s premiums.

When enrollees start seeing how much their deductibles are – commonly $3,000 to $5,000 – many more may choose to stop paying ObamaCare’s higher out-of-pocket expenses.

If that happens, it’s really bad news for doctors and hospitals.

“Section 1412 of the health law gives consumers a 90-day ‘grace period’ before their subsidized plan is canceled for nonpayment. But insurers only have to keep paying doctors and hospitals for 30 days. The next 60 days of care on the care provider,” explains Betsy McCaughey.

“[I]t could pose a significant financial risk for medical practices,” the American Medical Association warns.

The HHS Secretary has no express power to bail out such care providers.

For weeks, CFIF has detailed the hazard presented by two proposed Senate bills – Johnson/Crapo and Warner/Corker – claiming to offer home finance “reform” of Fannie Mae and Freddie Mac.

It was therefore refreshing to see The Wall Street Journal reach the same conclusion this morning in its opinion piece entitled “Sons of Fannie Mae.” While reform of Fannie and Freddie is indeed critical, the latest attempt from Senators Tim Johnson (D – South Dakota) and Mike Crapo (R – Idaho) isn’t the answer. “The bad news,” it reads, “is that the Senators want to replace Fan and Fred with multiple private mortgage bond issuers that would each also have a taxpayer guarantee.”

It continues:

While Johnson-Crapo claims to end Fan and Fred’s “affordable housing” requirements, the bill is larded with provisions to encourage and subsidize loans to non-creditworthy borrowers while driving up the price of housing. The bill includes a new 0.1% tax on federally insured mortgages that will be distributed to housing slush funds across the bureaucracy.”

The bill also promises to continue subsidizing mansions that don’t need help:

On that point, Johnson-Crapo also ensures that the universe of loans eligible for subsidies will continue to grow. Under their proposal, the FMIC could raise the size of mortgages eligible for federal insurance as home prices rise. But it bars the agency from ever lowering this so-called conforming loan limit. Guess what would happen the next time a President runs for re-election?

According to the National Association of Realtors, February’s median sales price of an existing U.S. home was $189,000. Yet Fannie and Freddie offer mortgages up to $417,000 across the country and in high-cost areas they run as high as $625,500. That means that with 20% down a borrower can get taxpayer help when paying more than $780,000 for a house. In most places that’s called a mansion.

Beyond the obvious reasons wealthy buyers don’t need subsidies, the “jumbo” market for mortgages above the conforming limits has been thriving. At times in the last year jumbo rates have been lower than conforming rates and even now are within four-tenths of a percent.”

Some of our friends say the political window to kill Fannie and Freddie is closing, and Johnson-Crapo is the only vehicle that can do so because it is the only one that has White House support. We’re not so sure. Texas Rep. Jeb Hensarling has a better reform in the House, and a GOP Senate might be able to cut a better deal next year. The Senate should go back to the drawing board and come up with a reform that doesn’t use the demise of Fan and Fred to create a dozen mini-me replacements that could grow to become the same monsters.”

As Tax Day approaches, consider the bright side – at least there’s no ObamaCare form you have to fill out.

That changes next year.

“According to the agency, the IRS plans to include a specific line on the 1040 forms for taxpayers to ‘self-attest’ whether they purchased insurance,” reports Fox News. “It will most likely include a worksheet for taxpayers to calculate how much they owe – essentially either a flat penalty or a percentage of their income.”

Next year the penalty is either $95 or 1 percent of your income, whichever is greater.

The IRS plans to confirm whether taxpayers are telling the truth about purchasing insurance by getting enrollment records from insurance companies.

So along with increased paperwork, we can all look forward to a greater amount of government surveillance into our insurance (and eventually our health) records.

Timothy Lee, CFIF’s Senior Vice President of Legal and Public Affairs, discusses what is wrong with the NLRB’s regional ruling that scholarship football players are employees and eligible to form a union.